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EXHIBIT 10.7
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement"), dated March 28, 2000, with
an effective date of April 1, 2000, is entered into between SUNRISE ASSISTED
LIVING, INC. (the "Company") and XXXXX X. XXXXXX (the "Consultant").
WHEREAS, the Company desires to obtain the consulting services of the
Consultant as an independent contractor to assist with real estate related
matters, to provide advice and counsel to its Chairman of the Board and Chief
Executive Officer and to its President and to provide such other advice, counsel
and assistance as its Chairman of the Board and Chief Executive Officer or its
President may require; and
WHEREAS, the parties desire to enter into this Agreement to set forth the
terms and conditions for the consulting relationship of the Consultant with the
Company.
NOW, THEREFORE, it is AGREED as follows:
1. ENGAGEMENT.
(a) During the term of this Agreement (as set out in Section 6
hereof), the Consultant shall serve as a consultant to the Company. The
Consultant shall perform consulting services as and when reasonably requested by
the Chairman of the Board and Chief Executive Officer of the Company or by the
President of the Company. The Consultant shall render advisory and consulting
services to the Company of the type customarily performed by persons serving in
similar limited consulting capacities, consistent with the knowledge and
experience possessed by the Consultant. The Consultant's services shall include
assisting the Company with real estate sales, acquisitions and development
matters, providing related advice and counsel to the Chairman of the Board and
Chief Executive Officer of the Company and to the President of the Company and
providing such other advice, counsel and assistance as the Chairman of the Board
and Chief Executive Officer of the Company or the President of the Company may
reasonably request. Unless the parties otherwise agree in writing, the
Consultant's services to the Company shall terminate at the end of the term of
this Agreement.
(b) The parties acknowledge and agree that the Consultant's
fulfillment of his obligations to the Company hereunder will require
substantially all of the Consultant's full business time.
(c) The parties acknowledge that the Consultant will be elected
to serve as Vice Chairman of the Board of Directors of the Company as long as he
continues as a director of the Company; provided, however, that nothing herein
shall require the Company or any of its directors, officers or employees to
re-nominate the Consultant for election to the Board of Directors at the end of
his next term thereon expiring in May 2003 or at any time thereafter.
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2. COMPENSATION AND EXPENSES. The Company agrees to pay the
Consultant during the term of this Agreement at the rate of $205,000 per year,
payable in equal monthly installments on the first day of each month during the
term of this Agreement (and equitably pro rated for any partial month during the
term of this Agreement). The first such monthly installment shall be due and
payable on or before the first day of the term hereof. The Company shall
reimburse the Consultant for all reasonable travel, lodging, entertainment and
other incidental expenses incurred by the Consultant in connection with the
Consultant's performance of services hereunder, provided that all such expenses
are in accordance with the Company's policies applicable to similar expenses
incurred by its executive management employees. The Company shall (without
limitation) reimburse the Consultant for all legal and other reasonable expenses
incurred by the Consultant in connection with the negotiation and consummation
of this Agreement. The Consultant will invoice the Company monthly for any
reimbursement of expenses payable hereunder in respect of services performed and
expenses incurred during the previous month, and each such invoice shall be
accompanied by receipts and other supporting documentation of expenses incurred
as reasonably requested by the Company. The Company shall pay the expense
reimbursements that are due under this Agreement within a time frame consistent
with its normal practice for senior executives. The parties acknowledge and
agree that any amounts paid by the Company to the Consultant under this
Agreement are in lieu of any compensation or expense reimbursement to which the
Consultant might otherwise be entitled to by virtue of his position on the Board
of Directors and as Vice Chairman of the Board of Directors of the Company.
3. EFFECT ON OPTIONS AGREEMENTS. The Company and the
Consultant agree that notwithstanding anything herein or in any other agreement
entered into by the Company and/or the Consultant to the contrary, all of the
Consultant's existing options, severance benefits and other entitlements will
continue to vest and be exercisable or available pursuant to the terms of the
stock option agreements and severance or other agreements pursuant to which such
options, benefits or entitlements were granted to the Consultant as if his
employment with the Company had continued through March 31, 2003, even if this
Agreement is terminated earlier for any reason. In furtherance thereof, the
Company and the Consultant hereby restate and/or amend all of the option
agreements (the "Option Agreements") granted to the Consultant pursuant to the
applicable stock option plans (including but not limited to the Sunrise Assisted
Living, Inc. 1995 Stock Incentive Plan, the Sunrise Assisted Living, Inc. 1996
Non-Incentive Stock Option Plan, the Sunrise Assisted Living, Inc. 1997
Non-Incentive Stock Option Plan and the Sunrise Assisted Living 1999 Stock
Option Plan) to provide that the Consultant's relationship with the Company as a
consultant, as established pursuant to this Agreement, shall be deemed to be an
employment relationship with the Company for purposes of the Option Agreements
through March 31, 2003, even if this Agreement is terminated earlier for any
reason.
4. OFFICE AND SUPPORT SERVICES. During the term of this
Agreement, the Company shall continue to provide the Consultant with office
space, supplies, secretarial and staff support and other appropriate support
services and facilities that are reasonably required by the Consultant in
connection with his performance of services hereunder. In addition, during the
term of this Agreement, the Consultant shall continue to be entitled to his
current car allowance from the Company under the same terms as his car allowance
from the Company as of the date immediately prior to the date of this Agreement.
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5. TERM. The term of this Agreement shall be for three (3)
years, through March 31, 2003, unless earlier terminated pursuant to Section 8
hereof. The parties by mutual written agreement may extend the term of this
Agreement.
6. STANDARDS. The Consultant shall perform his duties and
responsibilities under this Agreement using his good faith efforts, in a
diligent, timely, professional and workmanlike manner.
7. CONFIDENTIALITY; COOPERATION WITH LEGA1 PROCESS;
NON-COMPETITION; NON SOLICITATION.
(a) The Consultant acknowledges that he has held a
sensitive management position with the Company and will continue to perform
services for the Company as provided herein and that, by virtue of having held
such position and performing such services, he has had access to and has learned
(and will continue to have access to and to learn) certain material proprietary
information and trade secrets reasonably deemed confidential by the Company in
good faith and directly pertaining to its specific business and operations
(collectively, the "Proprietary Information"). The Proprietary Information may
include information marked confidential, restricted or proprietary by the
Company and related to the Company's unique products, systems, software,
finances (including prices, costs and revenues), marketing plans, methods of
operation, prospective and existing contracts, business plans, procedures,
strategies (including acquisition strategies), customer lists, referral sources,
lists of doctors, and other unique information concerning the Company's specific
practices and procedures. The Consultant represents that he will not disclose
any such information to any other person, except as may be required by law or as
may be necessary in furtherance of the performance of services hereunder.
Notwithstanding the foregoing, Proprietary Information shall not include (i)
information in the public domain through no fault of the Consultant; (ii)
information received by the Consultant from a third party not under an
obligation to keep such information confidential; or (iii) the Consultant's
general know-how and professional expertise.
(b) The parties agree that no provision of this Section
7 or any other provision of this Agreement shall be construed or interpreted in
any way to limit, restrict or preclude either party hereto from cooperating with
any governmental agency in the performance of its investigatory or other lawful
duties or producing materials or giving testimony pursuant to a court
proceeding, or restrict the Consultant in the performance of his services to the
Company. The Consultant agrees that if he receives a subpoena or is otherwise
required by law to provide information to a governmental entity or other person
concerning the activities of the Company or his activities in connection with
the Company's business, he will promptly notify the Company of such subpoena or
requirement and deliver to the Company a copy of such subpoena or other notice,
unless such disclosure would, in the opinion of a recognized legal expert on
such matters, be prohibited by law.
(c) Until March 31, 2003, the Consultant shall not
provide similar consulting services to any business or other enterprise in the
assisted-living industry directly competing with the Company in any geographic
market where the Company maintains an assisted-living facility (unless the Board
of Directors of the Company shall have authorized such activity or the Company
shall have consented thereto in writing).
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(d) The Consultant agrees that during the term of this
Agreement and for twelve (12) months thereafter he will not solicit any employee
of the Company to leave the Company's employment (unless the Company shall have
consented thereto).
8. TERMINATION OF SERVICE; BOARD RESIGNATION; SEVERANCE.
(a) Either party shall have the right to terminate this
Agreement and the Consultant's services hereunder in accordance herewith at any
time upon thirty (30) days prior written notice to the other party.
(b) The Consultant and the Company shall use their best
efforts to provide for a proper transition and wind-down of the Consultant's
activities hereunder in connection with any such termination of this Agreement
and of such services.
(c) Upon termination of this Agreement, the Consultant
agrees to resign from the Company's Board of Directors and all committees
thereof, and to resign as Vice Chairman of the Board, effective in each case,
upon such termination, unless the Company, acting through its Board of
Directors, requests in writing that the Consultant withdraws such resignation
and the Consultant agrees in writing to so withdraw such resignation prior to
the termination of this Agreement. In furtherance thereof, the Consultant shall
provide a letter to the Company embodying the agreement set forth in the
immediately preceding sentence.
(d) The Consultant shall be entitled to the benefits
established for an "Executive" under the Company's Senior Executive Severance
Plan as adopted by the Board of Directors of the Company on February 25, 2000 or
as amended hereafter for the President of the Company (the "Severance Plan")
notwithstanding anything herein or in any other agreement entered into by the
Company and/or the Consultant to the contrary, and the Consultant shall be
subject to all the terms of the Severance Plan as if he were designated as an
"executive" under the Severance Plan (including, without limitation, the
provisions regarding parachute payments contained in Section 6 of the Severance
Plan) until the termination of this Agreement (unless at the time of any such
termination by the Company, the Consultant is performing his duties hereunder
and the Company has knowledge of a pending change in control transaction that
upon consummation would entitle the Consultant to benefits under the Severance
Plan, in which event the Consultant's entitlement to the benefits established
under the Severance Plan will survive with respect to such change in control
transaction as if he continued as an "executive" thereunder).
9. NO ASSIGNMENTS. This Agreement is personal to each of the
parties hereto. Neither party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party hereto.
However, in the event of the death of the Consultant all rights to receive
payments hereunder shall become rights of the Consultant's estate.
10. AMENDMENT; MODIFICATION: WAIVER. No amendments or additions
to this Agreement shall be binding unless in writing and signed by both of the
parties hereto. No delay or failure at any time on the part of the Company or
the Consultant in exercising any right, power or privilege under this Agreement,
or in enforcing any provision of this Agreement, shall impair any such right,
power, or privilege, or be construed as a waiver of any default or as any
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acquiescence therein, or shall affect the right of the Company or the Consultant
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
11. SECTION HEADINGS. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
12. SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
13. NOTICES. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered, sent by overnight
courier, or mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Company:
Sunrise Assisted Living, Inc.
0000 Xxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
Attention: Chairman of the Board and Chief Executive
Officer
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx, L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Fax No.: (000) 000-0000
If to the Consultant:
Xxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. xx Xxxxxx, Esq.
Fax No.: (000) 000-0000
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or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior oral or written
agreements, commitments or understandings, with respect to the matters provided
for herein, except that the various stock option agreements and/or severance or
entitlement agreements between the Consultant and the Company (including the
Severance Plan) shall not be superseded by this Agreement.
15. INDEPENDENT CONTRACTOR STATUS. The Consultant shall have
sole control of the manner and means of performing his services under this
Agreement and shall complete such services in accordance with his own means and
methods of work. The parties intend that the Consultant shall be an independent
contractor and that the Consultant shall be responsible for the payment of
applicable income and self-employment taxes with respect to his compensation
under this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Delaware, excluding the choice of law rules thereof.
17. ARBITRATION. Any disputes between the Company and the
Consultant in any way concerning this Agreement or the services to be provided
hereunder shall be submitted at the initiative of either party to mandatory
arbitration before a single arbitrator in Wilmington, Delaware pursuant to the
Commercial Arbitration Rules of the American Arbitration Association, or its
successor, then in effect. The decision of the arbitrator shall be rendered in
writing, shall be final and may be entered as a judgment in any court in the
State of Delaware. The parties irrevocably consent to the jurisdiction of the
federal and state courts located in Delaware for this purpose. Each party shall
be responsible for its or his own costs incurred in such arbitration and in
enforcing any arbitration award, including attorney's fees.
18. AUTHORITY TO ENTER INTO THIS AGREEMENT. Each party
executing this Agreement has the requisite corporate power and authority to
enter into this Agreement and all of the provisions of this Agreement have been
duly authorized by all necessary corporate action.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered in their name and on their behalf as of the date first
above written.
SUNRISE ASSISTED LIVING, INC.
Attest:
By: s/ Xxxx X. Xxxxxxxx
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(Secretary) Chairman of the Board and
Chief Executive Officer
CONSULTANT
s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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